GST & Property 2023: Expert Tips – 5 program on-demand webinar series

Program 1: Property Ventures and Enterprises: Crucial But Often Overlooked

The ATO has indicated that whilst considerable thought may be given as to whether a property venture is on income or capital account, less thought is given as to whether an enterprise is being conducted to tick off the GST aspects of the arrangement. This session looks into when GST can apply to a property development, including:

• Is an enterprise different to a business?
• What are the factors that determine whether it is a business or profit-making undertaking being conducted?
• Does determining whether an enterprise is being conducted for GST follow the same capital v revenue distinction for income tax?
• GST issues to consider for:
  • the subdivided backyard
  • subdivided farmland (San Remo Heights Pty Ltd v C of T [2020] AATA 4023)
• Can the definition of an “enterprise” differ for SMSFs? (Sec. 9.20(1)(da) GST Act 1999, Collins Anor ATF The Collins Retirement Fund v FC of T [2022] AATA 628)
• The ATO’s data matching of property sales and review activity being undertaken
• Practical examples

Program 2: How GST Interacts with Retirement Living, Residential Care Facilities and Social Housing

Entering into certain accommodation arrangements can include services in addition to the accommodation, when dealing with retirement villages, aged and disability care and social and affordable housing options. This session looks into whether or not GST can apply to these costs, including:

• Retirement villages, including:
  • initial contributions and the loan-lease agreement model
  • additional services provided including commercial facilities
  • outgoing payments and deferred management fees
• Residential care, including:
  • Government and non-government funded
  • apportioning accommodation and other services, including daily meals, laundry, care etc.
  • serviced apartments
• Care and accommodation supplied by charitable organisations, including:
  • GST-free supplies under sec. 38-250 GST Act 1999
  • the ATO benchmark market value tables (QC 32370)
• NDIS funded care and accommodation services with GST (QC 16263)

Program 3: Building to Rent and Not to Sell

In Australia the build to rent market is in its relative infancy, but the increase in the proportion of households renting and the prospect of steady income for investors has seen an increase in investment in this area. How does GST factor into this unfolding model? This session explores the issues, including:

• What is build to rent?
• To what extent do the physical characteristics of a building affect the GST treatment?
• Can having a manager with a 24 hour concierge service change the residential premises status of a property?
• GST implications of mixed use elements, e.g. retail or commercial elements of a build to rent precinct
• GST implications of other residential elements, e.g. social and affordable housing, specialist disability accommodation
• Acquiring property for build to rent development
• What are the GST implications for the property owner where a property is subject to a later change of use?
• Is the co-living trend akin to the GST treatment for boarding houses?
• GST and valuing build to rent properties
• Practical examples

Program 4: Defining “Commercial Residential Premises”: What’s In and What’s Out?

With the changing trends in the attributes of property being used or built to provide either short or long term residential accommodation, the line can become blurry as to whether the arrangement is considered residential or commercial residential. Whilst the line can be hard to identify, the difference in the GST treatment can be significant. This session explores the issues, including:

• What are the tests to determine if a property is commercial residential premises? (GSTR 2012/6)
• What are the factors that suggest premises are not commercial residential premises?
• What the GST options are for long term accommodation in commercial residential premises, including:
  • how input tax credits are calculated for the options
• Does the GST treatment change if the accommodation provider is a non-profit entity?
• Would a private home that operates a bed and breakfast business be classified as commercial residential premises?
• Do common facilities (ie. laundry, gym access, common areas, etc.) change a classification from residential to commercial residential?
• Airbnbs:
  • what is their GST classification?
  • does the classification depend on the services offered? (ie. supply of meals or other services on top of accommodation)
  • review of FFYS v FCT [2021] AATA 4844
• Practical examples

Program 5: GST and Property Settlements: Practicalities Explained

Since 1 July 2018, the GST at settlement rules have been in place. However, from all accounts from the ATO, the new process is not always fully understood. This session looks at the requirements and the settlements affected, including:

• The properties GST withholding applies to
• The obligations for the seller and purchaser
• How the rules apply for:

• instalment contracts
• the margin scheme
• mixed and multiple supplies

• Are settlement adjustments included in the calculation of the GST withholding amount? (GSTD 2006/3)
• Reporting the sale on the BAS and how the ATO process the GST credit
• What to do if the GST credit isn’t showing on the GST property account
• What are the foreign resident capital gain withholding requirements?
• Practical examples